overview what is identity theft? what is tax identity theft? –how does tax identity theft happen?...
TRANSCRIPT
Overview• What is identity theft?
• What is tax identity theft?– How does tax identity theft happen?
– How to lessen your chance of being a victim
– What to do if you’re a victim
• New Twist: IRS Imposter Scams
What IsIdentity Theft?
What Is Identity Theft?
• Identity theft is the misuse of another’s personal information to:
– fraudulently obtain
• goods or services
• a job
• medical treatment, medications, or equipment
• government services or benefits
– hide from government, law enforcement, or others who perform background checks
Examples of Information Valuable to Identity Thieves
• Name, address, telephone number
• Date of birth
• Social Security number
• Medicare card number and health insurance number
• Passport number, driver’s license number
• Financial account numbers (bank account or credit card numbers)
• Passwords (mother’s maiden name, father’s middle name)
• Biometric data (fingerprint, iris scan)
How Does Identity Theft Hurt Victims?• Direct financial losses
• Damage to financial status, credit score, and reputation
• Denial of employment, housing
• Problems with IRS
• Possible civil judgments or criminal record
• Emotional harm
• Time and cost of repairing damage
What IsTax Identity Theft?
What Is Tax Identity Theft?
• Filing a fraudulent tax return using another person’s Social Security number
• Claiming someone else’s children as dependents
• Claiming a tax refund using a deceased taxpayer’s information
• Earning wages under another person’s Social Security number
Scope of the ProblemFTC statistics:
• 2012: – 43.4% of all identity theft complaints pertained to taxes or wages
• 2013: – 33.9% of all identity theft complaints pertained to taxes or wages
• 2014:– 32.8% of all identity theft complaints pertained to taxes or wages
Source: Consumer Sentinel Network Data Book for January – December 2014
How Victims’ Information is Misused
Source: Consumer Sentinel Network Data Book for January – December 2014
Gov't Benefits 39%
Credit Card 17%
Utilities 13%
Bank 8%
Employment 5%
Loan 4%
Other 22%
Types of Government Benefits Fraud
• Tax or wage-related fraud 32.8%• Gov’t benefits applied for/received 4.1%• Other gov’t docs issued/forged 1.3%• Driver’s license issued/forged 0.5%
• TOTAL: 38.7%
Source: Consumer Sentinel Network Data Book for January – December 2014
Imposter Scams – FTC Stats
• CY-2013 2,185
• CY-2014 52,138
25 times as many complaints!!!
How DoesTax Identity Theft
Happen?
How Does Tax Identity Theft Happen?• Lost or stolen wallets, Medicare cards, smartphones
• Theft by family, friends, visitors, advisors
• Dumpster diving
• Stolen mail or tax returns
• Unsolicited calls from telemarketers, prize promoters, etc. asking for personal information
• Buying information from corrupt insiders or volunteers at:
– banks, debt collectors
– hospitals, clinics, medical offices, nursing homes
– prisons
– schools, government offices
• Corrupt tax preparation services
How Does Tax Identity Theft Happen Online?
• Data breaches, hacking into computers and networks
• Phony emails from imposters
• Unsecure Wi-Fi hotspots
• Peer-to-peer file sharing
• Social networking
• Downloading software or apps from unknown sources
Warnings Signs of Possible Tax Identity Theft
• Social Security number is lost, stolen, or compromised
• Unusual delay in getting a refund
• IRS notification:
– duplicate tax return filing
– unreported income
– duplicate dependents
How To Lessen Your Chance of Being a Victim
Reducing the Risk of Tax Identity Theft• Minimize personal information in purses or wallets, or
on smartphones
• Shred financial documents before disposing
• Don’t give out personal information unless you know who’s asking for it and why they need it
• Keep personal information secure — at home, at the office, in your car
• Don’t click on links sent in unsolicited email
Reducing the Risk (cont.)• Monitor accounts and review financial statements
regularly
• Watch mail for statements for accounts or credit cards that you didn’t open
• Confirm you get the statements you expect in the mail
• Get your free annual credit report at www.annualcreditreport.com
• Make a copy of everything in your wallet and store it safely
Preparing and Filing Tax Returns• Know your tax preparer
• Mail tax returns as early in the tax season as possible
• Do not put tax returns in outgoing mail; mail tax returns directly from post office
• If filing electronically, use a secure network and encrypt
• Store copies of your returns in a secure place
• Shred drafts, calculation sheets, and extra copies
• Do not respond to unsolicited emails that appear to be from the IRS
Additional Advice for Older Americans
• Protect Medicare card number, which might be SSN
• Protect personal information at home like you would cash or jewelry
• Make sure to open and review your mail and email
• Ask medical and care facilities about their data protection policies
• Select assistants and other support professionals with care
What to Do If You’re a Victim
Steps for Tax Identity Theft Victims
• Contact the IRS Identity Protection Specialized Unit at 800-908-4490 (8 a.m. to 8 p.m., local time)
• File IRS Identity Theft Affidavit (Form 14039)
• Have valid identification (government-issued identification: Social Security card, driver’s license, or passport)
• When your case is resolved, you will be issued an Identity Protection PIN
• Go to: irs.gov/identitytheft
Steps to Prevent More Harm• Contact credit reporting agencies
– place a fraud alert
– consider a credit freeze
– request and review your credit report
• File a complaint with the FTC at 877-ID-THEFT
• File a police report
• Contact the companies where fraud occurred
Fraud Alerts• 90 days
• Renewable for 7 years
• Entitles victim to one free credit report
• Need to call only one of the three credit reporting agencies; it will notify the others:
• Equifax: 800-525-6285• Experian: 888-397-3742• TransUnion: 800-680-7289
• Creditors must take “reasonable steps” to verify your identity
Credit Freezes
• Must request in writing from each credit reporting agency
• Blocks all new credit
• Effective until lifted
• Possible fees, if no accompanying police report or Identity Theft Report
New Twist: IRS Imposter Scams
What are IRS Imposter Scams?
• Scammers posing as the IRS call and say you owe taxes
• They might also:– threaten to arrest or deport you if you
don’t pay – know all or part of your SSN
What are IRS Imposter Scams? (continued)
• They might also:– rig caller ID to make it look like call is from
DC (202 area code) so you think it is the IRS–Demand immediate payment by pre-paid
debit card or wire transfer– Send you bogus IRS emails to further the
scheme
IRS Imposter Scams – Who is Affected?
• Largest telephone scam in TIGTA’s history• 300,000+ contacts across the US• Over $14M paid to scammers• Top 5 states* affected (by dollar loss):
1. California 4. Pennsylvania 2. Florida 5. New Jersey 3. New York
*As of January 2015
IRS Imposter Scams – What You Need to Know• The IRS will not ask you to pay with
prepaid debit cards or wire transfers• The IRS will not ask for a credit card
number over the phone• The IRS will not threaten arrest,
deportation or loss of your drivers license• The IRS will not send you emails
IRS Imposter Scams – What You Need to Know (continued)
• If the IRS needs to contact you, they will first do it by mail
• If you have any doubts, call the IRS directly at 800-829-1040
Report IRS Imposter Scams• TIGTA = Treasury Inspector General for Tax
Administration– http
://www.treasury.gov/tigta/contact_report_scam.shtml
– 800-366-4484• FTC
– ftc.gov/complaint– 877-FTC-HELP
Resources
ResourcesFTC: ftc.gov/idtheft
ftc.gov/taxidtheft
IRS: irs.gov/identitytheft
TIGTA: treasury.gov/tigta
Dept. of Justice - Office for Victims of Crime (OVC): ovc.gov
National Identity Theft Victims’ Assistance Network (NITVAN):identitytheftnetwork.org
Identity Theft Resource Center (ITRC): idtheftcenter.org
Questions?